US Tariff and Trade Enforcement: 2025 Year in Review

At a Glance

• New Trade Fraud Task Force. The Departments of Justice and Homeland Security established a cross-agency Trade Fraud Task Force to investigate and bring civil and criminal enforcement actions. The Task Force is interested in developing cases against importers alleging false country of origin, undervaluation, and misclassification, leveraging data-driven tactics and actively encouraging whistleblowers to participate in rewards programs.
• Aggressive False Claims Act (FCA) Enforcement. The Department of Justice (DOJ) is using the False Claims Act, including whistleblower suits, to target customs and tariff fraud. In 2025, it settled multiple such cases, including one for more than $54 million, intervened in qui tam actions that it did not settle, and obtained an appellate court affirmance of a $24 million judgment.
• Continued Heightened Scrutiny for Importers. Importers should expect more enforcement in 2026, as DOJ’s focus on trade fraud is ongoing and penalties for violations are expected to continue. Errors in import declarations (tariff classification, valuation, country of origin) may pose significant risk.

As anticipated, 2025 brought aggressive and in some cases unprecedented enforcement of US tariff and trade violations, both under the False Claims Act (FCA) and via criminal enforcement, following the Trump administration’s seismic shift in the focus of imposing accountability for import violations. What used to be a more limited area of risk must now be elevated on the short list of compliance priorities for all US companies importing into the United States. We expect this enforcement trend to expand in 2026, consistent with the Trump administration’s trade policies and priorities.

Formation of Trade Fraud Task Force; Enhanced Importer Risk; Materially Increased Legal Exposure

In August 2025, the DOJ and the Department of Homeland Security (DHS) announced the formation of a cross-agency Trade Fraud Task Force for the purpose of bringing “robust enforcement against importers and other parties who seek to defraud the United States” by evading tariffs and other duties. 

DOJ and DHS announced their intention to pursue those who violate customs laws by bringing duty and penalty collections actions under the Tariff Act of 1930, actions under the FCA, and parallel criminal prosecutions, “wherever appropriate.” 

The Task Force “encourages” whistleblowers to file actions under the qui tam provisions of the FCA and to make referrals through the DOJ Criminal Division’s Corporate Whistleblower Program. It also encourages importers and their agents to audit their importing practices and to voluntarily self-disclose and remediate any unlawful behavior.

The primary mechanism for customs violations in years past was the US Customs and Border Protection Agency (CBP) applying civil, administrative penalties for import violations and seeking back duties under the Tariff Act of 1930. Enforcement actions under the FCA were not common — but that’s no longer the case. The FCA, enforced by DOJ and often triggered by whistleblower complaints, is now a primary means for holding noncompliant companies accountable (and generating government revenue) for these violations — potentially involving tens of millions of dollars of legal exposure. Recent settlements reflect this new reality. While innocent violations that occur despite the exercise of reasonable care should not ordinarily lead to FCA liability, the FCA broadly imposes liability on those who knowingly avoid paying tariffs or duties owed to the United States.  

With the Trump administration implementing multiple new tariff regimes — many with high duty rates that could stack with other tariffs — enforcement risks have never been greater.

False Claims Act Enforcement

As addressed previously, the FCA is the principal statute for enforcing fraud against the government, including in the trade context. It imposes liability on those who avoid paying an obligation to the government (such as tariffs) in the form of treble damages and penalties of approximately $14,000 to $28,000 per avoided claim. In addition, under the FCA’s qui tam provisions, whistleblowers (referred to as relators) stand to receive 15-30% of any recovery by the government, depending on the facts and circumstances. Most FCA cases are triggered by relators and, as the examples below illustrate, there have recently been hefty awards to relators who have brought FCA claims to the government’s attention.

Notable Trade and Tariff Enforcement Matters Resolved Under the FCA

During the past year, the government settled multiple trade and tariff enforcement matters under the FCA, including the following:

• March 2025: A California-based flooring company and two individual owners agreed to pay $8.1 million to settle allegations that they knowingly evaded antidumping (AD), countervailing (CVD), and Section 301 duties on multilayered wood flooring imported from China between September 2019 and July 2022. The government alleged that the company submitted false information to CBP about the identity of manufacturers and country of origin of the flooring to avoid paying required duties. The settlement resolved a whistleblower lawsuit filed by a competitor, which will receive about $1.2 million from the proceeds.
• July 2025: Two related corporate importers agreed to pay $6.8 million to settle allegations that they knowingly failed to pay customs duties on plastic resin imported from China. The companies admitted that, starting in May 2019, they failed to declare the correct country of origin and value for certain imports, resulting in underpayment of duties. According to the government, the settling parties received credit for their cooperation, which included voluntarily disclosing the violations, conducting an internal investigation, sharing relevant facts with the government, analyzing damages, and implementing remedial measures, such as disciplining staff and strengthening compliance. In December 2025, the former chief operating officer of one of the disclosing companies pled guilty to criminal charges (as discussed below).
• July 2025: A Pennsylvania-based patio furniture company agreed to pay $4.9 million to settle allegations that it evaded AD/CVD on extruded aluminum parts imported from China. The government alleged that the company falsely claimed certain furniture parts were not subject to these duties and attempted to disguise some aluminum parts as sham furniture kits, while also failing to correct previous customs forms after learning of their inaccuracies. The settlement arose from a whistleblower lawsuit filed by a former employee, who will receive nearly $1 million from the recovery.
• August 2025: A Dallas-based supplier of countertop and cabinetry products and its president agreed to pay $12.4 million to settle allegations that the company knowingly evaded or conspired to evade AD/CVD on quartz surface products imported from China between September 2018 and February 2023. The government alleged that the settling parties misrepresented these products as other materials with lower duties. The settlement arose from a whistleblower lawsuit, with the whistleblower receiving approximately $2.17 million.
• November 2025: A major audio electronics company agreed to pay nearly $11.8 million to settle allegations that it knowingly evaded AD/CVD on heat sinks made of extruded aluminum imported from China between June 2011 and March 2023. The government alleged that the settling party knowingly imported these products without paying the required duties and concealed its avoidance when confronted with its failure to pay the required duties. The settlement resulted from a whistleblower lawsuit, with the whistleblower receiving over $2.3 million.
• December 2025: A distributor of tungsten carbide products agreed to pay $54.4 million to settle allegations that knowingly evaded customs duties on Chinese-manufactured products. The settlement resolved claims that, from August 2020 through March 2024, the company misrepresented the country of origin by routing Chinese goods through Taiwan and falsely declaring them as Taiwanese to avoid Section 301 tariffs, misclassified products to reduce duties, and failed to pay marking duties on unmarked merchandise. The case originated from a whistleblower lawsuit, with the whistleblower receiving nearly $9.75 million from the settlement.

Pending FCA Trade and Tariff Actions

In addition to these settlements, the government announced that it had filed two suits under the FCA for tariff and trade enforcement. These actions are currently pending:

• April 2025: The United States intervened in a qui tam suit filed by a former employee against Barco Uniforms Inc., its executives, and several related companies. The government alleges that the defendants knowingly underpaid customs duties on imported apparel from overseas suppliers, primarily in China, by employing a double-invoicing scheme to undervalue the imported goods. The government claims the defendants continued this practice even after being warned by a third-party auditor about the risks of duty underpayment. This action is pending in the Eastern District of California.
• July 2025: The United States intervened in a qui tam suit filed by a former employee against Global Office Furniture, LLC and its owner, alleging that they conspired with a Chinese manufacturer to underpay customs duties on imported office chairs between 2019 and 2023 by using a double-invoicing scheme to submit undervalued entry summaries and invoices to CBP. The government also claimed that the defendants tried to destroy evidence of their fraud once they learned of the investigation. This action is pending in the District of South Carolina.

FCA Judgment Affirmed on Appeal

Finally, the government also prevailed on appeal of a large FCA judgment following a jury verdict:

• August 2025: In Island Industries, Inc. v. Sigma Corp., the Ninth Circuit affirmed a $26 million FCA judgment against an importer of pipe fittings that allegedly evaded antidumping duties (AD) of 182.9% for welded outlets imported from China by falsely declaring that the products were not subject to the duties and by falsely describing the products as steel couplings (not covered by the antidumping order) rather than as welded outlets (covered by the antidumping order). The court also rejected the defendant’s argument that tariff and customs violations cannot be enforced under the FCA due to the separate remedies available under the Tariff Act.

Criminal Enforcement

In addition to FCA enforcement, the government announced numerous criminal actions to enforce tariff and customs violations, including:

• August 2025: The DOJ charged two Denver-area companies and three of the companies’ executives with defrauding the federal government on sales of forklifts and conspiring to avoid paying required tariffs on forklifts imported into the United States. The defendants allegedly conspired to import forklifts from China, disguise the Chinese origin of the forklifts, and then sell them to federal agencies by falsely representing that the forklifts had been manufactured in the United States. As part of the scheme, the defendants allegedly conspired with a Chinese manufacturer to create fake invoices that undervalued the cost of the imported forklifts, enabling the defendants to evade more than $1 million in tariffs, duties, and fees. The defendants are charged with wire fraud, conspiracy to commit wire fraud, and conspiracy to enter goods into the United States by means of false or fraudulent statements. This prosecution is pending in the District of Colorado.
• November 2025: The DOJ charged a large Indonesian jewelry company, PT Untung Bersama Sejahtera, a/k/a UBS Gold, its Indonesian co-owner, and two employees, with conspiring from 2021 through October 2025 to evade more than $86 million in US customs duties and tariffs on over $1.2 billion in jewelry imports. UBS Gold, headquartered in Indonesia, ships jewelry to the United States and other global markets, and the criminal complaint alleges that the defendants used two related schemes to evade tariffs and duties.
  

  First, the defendants allegedly routed jewelry manufactured in Indonesia through Jordan and falsely claimed it was manufactured there to take advantage of the US-Jordan Free Trade Agreement. Second, starting earlier in 2025 after tariffs were imposed on goods from Jordan, the defendants allegedly shipped scrap gold from the United States to Jordan, falsely represented it as partially finished jewelry, exchanged it for Indonesian-manufactured jewelry, and then shipped that jewelry to the United States. In doing so, the defendants allegedly misrepresented the jewelry as US-manufactured and merely assembled in Jordan. This criminal prosecution is pending in the District of New Jersey.

• November 2025: Able Groupe Inc., which operated LittleBundle.com, pled guilty to two felony charges for illegally importing and smuggling European infant formula into the United States. The company pled guilty to importing food without providing prior notice to FDA (required by the FDA per the Federal Food, Drug, and Cosmetic Act when food is imported into the United States), as well as to passing and attempting to pass false and fraudulent documents through customs to defraud the United States. The company’s plea agreement includes a proposed forfeiture of $304,640, and a total recovery by the government of approximately $2.3 million.
• December 2025: The former chief operating officer (COO) of a global plastic resin distributor pled guilty to conspiracy to smuggle goods into the United States.According to court documents, the defendant instructed subordinates to misrepresent the manufacturer and the country of origin in documents submitted to CBP to avoid paying required Section 301 duties. The defendant is currently awaiting sentencing.The manufacturer previously had voluntarily disclosed this matter and settled civilly under the FCA in July 2025 for $6.8 million (as discussed above). The government’s press release announcing the former COO’s guilty plea also announced that it was declining to bring criminal charges against the manufacturer due to its voluntary disclosure and cooperation with the government.

The Road Ahead

There is now a significant risk for potential penalties associated with import declaration violations beyond the traditional civil penalties enforced by CBP. What used to be a relatively well-defined and limited area of risk must now rank higher on the list of compliance priorities for all companies importing into the United States, whether the goods are raw materials, component parts, or finished products. We anticipate that aggressive civil and criminal enforcement of customs and trade laws will continue in 2026. With the formation of the Trade Fraud Task Force and the government’s active solicitation of whistleblower actions and tips, importers can expect more investigations and litigation regarding trade and tariff enforcement.